The officer issued a fresh s.10 notice two years after the first one and then assessed. Does the clock run from the second notice?
No, where the second notice is in substance the same as the first. The Chennai Bench held that a successor officer ought to have continued the proceedings begun by his predecessor under s.7(1), so limitation under s.11(1) ran from the first notice of 7 January 2019, the assessment had to be made by 31 March 2021, and the order passed on 25 March 2023 was hopelessly time-barred.
Decided by the ITAT (Manu Kumar Giri, Judicial Member and S.R. Raghunatha, Accountant Member) on 2025-04-30, reported as B.M.A. No. 3/Chny/2024. It bears on section BMA s.11, section BMA s.11(1), section BMA s.10(1), section BMA s.7(1) of the Income Tax Act 1961, in Assessment & Scrutiny, Appeals and How Tax Law Is Read matters.
It closes the most common way a Black Money Act assessment is rescued from limitation - a second notice issued to the same assessee on the same information, often on a change of officer. The Tribunal treats continuation of proceedings as the officer's duty, not his option.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The assessee held an account with Sanne Fiduciary Service Ltd, Jersey, numbered V169_V169235, with a balance of Rs 45,63,281.50 as on 31 December 2016. A notice under s.10(1) of the Black Money Act was issued on 7 January 2019. A second notice under s.10(1), similar in substance, was issued on 16 February 2021. The assessment was completed on 25 March 2023 with an addition of Rs 1,44,168, being dividend income from Vedanta Resources Plc - which is how a balance of Rs 45.63 lakh produced an addition of Rs 1.44 lakh - and the appeal came to the Tribunal as B.M.A. No. 3/Chny/2024 for assessment year 2016-17.
The appeal was allowed and the assessment order dated 25 March 2023 set aside as hopelessly time-barred (paras 9 and 10). The first notice under s.10(1) dated 7 January 2019 being similar in substance to the second dated 16 February 2021, the successor authority ought to have continued the proceedings initiated by his predecessor under s.7(1), and the assessment should have been made on or before 31 March 2021 (para 6).
The Bench compared the two notices and found them similar in substance, so that the second could not be treated as originating a fresh proceeding; s.7(1) obliged the successor officer to continue what his predecessor had begun (para 6). It applied the rule that a fiscal statute regulating a period of limitation must receive strict construction and that proceedings which have attained finality under the existing law by reason of the bar of limitation cannot be held to be open, taken from the Supreme Court in K.M. Sharma v. Income Tax Officer (para 7). It added, from Hope Textiles Ltd, that a writ of mandamus cannot issue to compel an authority to pass an order in violation of a statutory provision (para 8).
the assessment order dated 25.03.2023 is hopelessly time barred
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Handle my notice → Ask a CA on WhatsAppNo, where the second notice is in substance the same as the first. The Chennai Bench held that a successor officer ought to have continued the proceedings begun by his predecessor under s.7(1), so limitation under s.11(1) ran from the first notice of 7 January 2019, the assessment had to be made by 31 March 2021, and the order passed on 25 March 2023 was hopelessly time-barred. This was decided by the ITAT (Manu Kumar Giri, Judicial Member and S.R. Raghunatha, Accountant Member) and bears on section BMA s.11, section BMA s.11(1), section BMA s.10(1), section BMA s.7(1) of the Income Tax Act 1961. It is reported as B.M.A. No. 3/Chny/2024. It closes the most common way a Black Money Act assessment is rescued from limitation - a second notice issued to the same assessee on the same information, often on a change of officer. The Tribunal treats continuation of proceedings as the officer's duty, not his option. If it applies to you, the first step is this: Obtain every notice issued under s.10(1) and compare their text; the point turns on the two notices being similar in substance.
The assessee held an account with Sanne Fiduciary Service Ltd, Jersey, numbered V169_V169235, with a balance of Rs 45,63,281.50 as on 31 December 2016. A notice under s.10(1) of the Black Money Act was issued on 7 January 2019. A second notice under s.10(1), similar in substance, was issued on 16 February 2021. The assessment was completed on 25 March 2023 with an addition of Rs 1,44,168, being dividend income from Vedanta Resources Plc - which is how a balance of Rs 45.63 lakh produced an addition of Rs 1.44 lakh - and the appeal came to the Tribunal as B.M.A. No. 3/Chny/2024 for assessment year 2016-17. The matter was decided on 2025-04-30 by the ITAT (Manu Kumar Giri, Judicial Member and S.R. Raghunatha, Accountant Member). On those facts the ITAT held as follows. The appeal was allowed and the assessment order dated 25 March 2023 set aside as hopelessly time-barred (paras 9 and 10). The first notice under s.10(1) dated 7 January 2019 being similar in substance to the second dated 16 February 2021, the successor authority ought to have continued the proceedings initiated by his predecessor under s.7(1), and the assessment should have been made on or before 31 March 2021 (para 6).
The Bench compared the two notices and found them similar in substance, so that the second could not be treated as originating a fresh proceeding; s.7(1) obliged the successor officer to continue what his predecessor had begun (para 6). It applied the rule that a fiscal statute regulating a period of limitation must receive strict construction and that proceedings which have attained finality under the existing law by reason of the bar of limitation cannot be held to be open, taken from the Supreme Court in K.M. Sharma v. Income Tax Officer (para 7). It added, from Hope Textiles Ltd, that a writ of mandamus cannot issue to compel an authority to pass an order in violation of a statutory provision (para 8). In the words reproduced by the source cited on this page: "the assessment order dated 25.03.2023 is hopelessly time barred" The decision followed or applied K.M. Sharma v. Income Tax Officer (SC) - applied for strict construction of a period of limitation in a fiscal statute; Hope Textiles Ltd - relied on for the proposition that mandamus cannot compel an order in violation of a statutory provision.
It was decided by the ITAT on 2025-04-30 and is reported as B.M.A. No. 3/Chny/2024. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section BMA s.11, section BMA s.11(1), section BMA s.10(1), section BMA s.7(1), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The appeal was allowed and the assessment order dated 25 March 2023 set aside as hopelessly time-barred (paras 9 and 10). The first notice under s.10(1) dated 7 January 2019 being similar in substance to the second dated 16 February 2021, the successor authority ought to have continued the proceedings initiated by his predecessor under s.7(1), and the assessment should have been made on or before 31 March 2021 (para 6). It arises in Assessment & Scrutiny, Appeals and How Tax Law Is Read matters, on section BMA s.11, section BMA s.11(1), section BMA s.10(1), section BMA s.7(1) of the Income Tax Act 1961, and was decided by Manu Kumar Giri, Judicial Member and S.R. Raghunatha, Accountant Member. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. If they are, run limitation under s.11(1) from the first notice and say so as a ground of jurisdiction. Cite s.7(1) for the proposition that a successor officer continues the proceeding rather than starting a new one. Support the limitation argument with the rule of strict construction of periods of limitation in a fiscal statute taken from K.M. Sharma.
Searched for later treatment; none was found. That is not the same as a source affirming it. Decided 30 April 2025. Nothing applying, doubting or overruling it was located on a search for decisions on s.11 of the Black Money Act, which returned this order, Bindu Todi (Delhi Bench, 5 June 2026) and the Sunil Kumar Alagh orders (Mumbai Bench, 25 March 2026). The two Tribunal orders on s.11 run the same way but neither cites the other. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Para 9 as it reads on the page refers to 'the assessment order passed u/s 11(1) dated 25.03.2023', which is a slip: the assessment was passed under s.10(3) and s.11(1) is the limitation provision; a second reader could not confirm that wording and it should be checked against the order before it is relied on. The citations for K.M. Sharma and Hope Textiles are not printed on the page read and those decisions were not separately opened. No reporter citation is printed. An independent reading of the order confirmed the bench, the appeal number, both dates, the account and balance, and every step of the reasoning in paras 6 to 10 including the key quote, and corrected the figure in facts: the addition is Rs 1,44,168, not Rs 1,44,618, and the order identifies it as dividend income from Vedanta Resources Plc. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal was allowed and the assessment order dated 25 March 2023 set aside as hopelessly time-barred (paras 9 and 10). The first notice under s.10(1) dated 7 January 2019 being similar in substance to the second dated 16 February 2021, the successor authority ought to have continued the proceedings initiated by his predecessor under s.7(1), and the assessment should have been made on or before 31 March 2021 (para 6).
TaxSphere, “Pachamuthu Kumar v ADIT (Investigation)”, https://taxnotice.vittsphere.com/caselaw/case/pachamuthu-kumar-v-adit-bma-11-second-notice-cannot-restart-limitation/ (validity last checked 2026-09-16)
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